A flamboyant and controversial former prime minister at the centre of a corruption probe has launched a legal challenge against a decision by the Foreign Office to impose direct rule on one of Britain's remaining overseas territories.

Michael Misick has appealed against a decision to suspend the constitution of the Turks and Caicos Islands (TCI) and impose direct rule from London following the publication of a damning report into corruption in the Caribbean islands. The appeal, set to be heard in the High Court next month, also challenges a move by the Foreign Office to suspend trials by jury.

The legal fight spread to London after the publication of an official inquiry report chaired by the former High Court judge Sir Robin Auld, which concluded that there was "information in abundance pointing to a high probability of systemic corruption and/or serious dishonesty".

The report found "clear signs of political amorality and immaturity, and of general administrative incompetence" and recommended criminal investigations be launched against Mr Misick and four other ministers.

Mr Misick, who the report suggests built up a multimillion-dollar fortune between his election in 2003 and resignation in March, is at the centre of corruption allegations. The inquiry heard repeated claims that he and other ministers sold off Crown Land to property developers for personal gain.

Hearings were told of lavish spending by Mr Misick, including a luxury beachfront mansion, the use of private jets and a leased Rolls-Royce for his estranged wife, the hip hop music star and Hollywood actress LisaRaye McCoy-Misick. Mrs McCoy-Misick has since filed for divorce, citing her husband's infidelity with a stripper and his support for a second family in Miami.

Full details of the corruption claims emerged last week after the inquiry's report was accidentally published. The Auld commission published a censored copy of its report after two businessmen who featured prominently sought legal injunctions to prevent it naming them. However, the islands' chief justice revoked the ban preventing reporting of the full findings after it became clear that visitors to the website of the islands' Governor, Gordon Wetherell, were able to decipher material that had been inadequately blacked out.

Mr Misick, who denies any wrongdoing, is trying to fight back. During a stormy debate in the islands' parliament last month he condemned the Governor as a "racist dictator" and called for national unity "to fight the British common enemy".

While the Auld inquiry has been broadly welcomed, there has been widespread criticism of the FCO's decision to partially suspend the constitution and rule directly through the Governor, who is being supported by a team of expert advisers flown in. The decision to suspend jury trials for people accused of political corruption has been particularly criticised across the Caribbean.

Samuel Harvey, a former TCI minister, said: "The most serious charge the British have levelled against this administration is the one of systemic corruption. However, the problem goes deeper than that. The veritable fabric of our culture has been damaged. We have our own people doubting that we can rule ourselves."

Mr Harvey said he was unhappy at the way Britain was handling the situation. "Make no mistake, I also hold the British responsible. They have always had a sitting governor here. It would have been an easy fix had they been paying attention. The people know, and God knows, the opposition party has been speaking out. But our cries for fairness and balance fell on deaf ears."

Opposition leaders said they repeatedly protested to the Governor and the former Foreign Office minister Meg Munn about allegations of corruption but were ignored. In frustration, they approached members of the foreign affairs select committee who highlighted the scandal, noting "a palpable climate of fear" on the islands. This led to the setting up of the Auld commission.

Sensitive to allegations of "modern-day colonialism", Colin Roberts, a senior Foreign Office official, told islanders recently that, "even though it is an extremely serious move to suspend the constitution, that is the only appropriate way of dealing with the seriousness of the wrongdoing that appears to have taken place in the Turks and Caicos."